The 264-unit, class A multifamily development at 8885 W. Thunderbird Rd. was placed into bankruptcy during the listing period to avoid foreclosure, Brad Goff, a vice president with Trammell Crow Co. who represented the seller, Dallas-based Hartnett Group, tells GlobeSt.com. "The property was trending up in operations just a little too late," he says. "The owners were too many dollars in arrears to avoid a foreclosure sale."
According to Goff, the four-year-old property was encumbered with a HUD loan, with an interest rate of 8%, before it was placed in bankruptcy. "The bankruptcy made the debt go away and made it more attractive to the investment community," he says.
However, Goff points out closing a bankruptcy deal can be challenging. " The buyer has to deal with the uncertainly of whether or not the bankruptcy court will allow the purchase," he explains.
Riverwalk at Desert Harbor was the Hartnett Group's sole Arizona investment. "They developed the property and have no other multifamily holdings in Arizona and are now putting their capital back into their backyard," Goff says. "With this acquisition, Alliance gets an A-quality property in a great location at well below replacement cost just by sticking through the rather complex bankruptcy transaction."
The 93%-leased complex, positioned on 14.9 acres, consists of 20 two-story buildings. There are 104 one-bedroom units in designs of 740 sf to 948 sf and 160 two-bedroom apartments with floor plans of 934 sf to 1,014 sf. The average rental rate is $816 per month.
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